XRP Cools Down After Rally Traders Eye Next Move

Driven by a resurgence of optimism, XRP seemed poised to reach new heights. However, within just a few sessions, the momentum abruptly broke. The price is dropping, and volumes are collapsing. In a tense crypto market, this sudden reversal casts doubt on the strength of the bullish movement and raises questions about the cycle’s next phase. Should this be seen as a simple technical pause or the onset of a deeper decline?

XRP Falters : Volumes Freefall and Price Under Pressure

XRP has just recorded a significant deterioration in its liquidity indicators. According to CoinMarketCap data, XRP’s trading volumes plunged more than 40 % in 24 hours, down to $3.23 billion.

This sudden liquidity contraction comes as XRP marks its fourth consecutive day of decline, beginning after a local peak at $2.65 on May 14.

Currently, the crypto is trading at $2.36, down 3.43 % for the day. This pullback occurs amid a retreat in the crypto market, affected by global economic uncertainties.

The overall market has dropped to $3.27 trillion, erasing recent gains after reaching a weekly high.

Several key factors illustrate the loss of momentum in XRP :

• The price steadily declining since May 14, falling from $2.65 to $2.36 ;
• Trading volume reduced by 40 % in 24 hours, amounting to $3.23 billion ;
• Price drop to $2.31 recorded on Saturday morning ;
• RSI index slightly above 50, indicating a stagnation phase between $2 and $2.65 ;
• A negative macroeconomic context, affecting the entire crypto market.

This bearish sequence calls into question the strength of the recent bullish rally. The repeated rejection of $2.65, twice (on May 12 and 14), seems to have strengthened short-term sell positions. The market now appears to be entering an observation phase, seeking new directional signals.

Rising Speculative Leverage and Strong Adoption

While spot volumes and price are weakening, some indicators show a very different picture of the current situation. Indeed, open interest on XRP futures has jumped 41.6 % in one week, rising from $2.42 billion to $3.42 billion.

This increase in leverage indicates a significant rise in speculative activity, even as the price was losing momentum. Such a surge in leverage coincides with the recent rally in the price of the Ripple crypto, signaling strengthened directional conviction among traders.

This is a strong signal. Despite the drop in spot trading, futures players are taking positions en masse, potentially expecting a rebound or bullish breakout.

Also, the creation of new XRP wallets remains particularly dynamic, with about 3,500 addresses generated daily on average. This trend suggests that adoption and interest in XRP have not faded, even amid the market correction.

However, it is too early to determine whether these address creations come from retail investors seeking to accumulate on the dip or opportunistic actors riding crypto market volatility.

Luc Jose A.

Diplômé de Sciences Po Toulouse et titulaire d’une certification consultant blockchain délivrée par Alyra, j’ai rejoint l’aventure Cointribune en 2019.
Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l’économie, j’ai pris l’engagement de sensibiliser et d’informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu’elle offre. Je m’efforce chaque jour de fournir une analyse objective de l’actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.